The Foreign Investment Board (FIB) last week rejected the foreign investment application of a company that wants to launch a cryptocurrency exchange in Palau, stating that venture “would not provide an overall benefit to the national economy.”
Earlier a company called Silver Lake applied for a Foreign Investment Application Certificate (FIAC) to launch a put up a cryptocurrency exchange or a digital currency exchange in Palau.
The application was filed amid the Financial Institution Commission (FIC) moratorium against any activity that involved cryptocurrency.
The board through its chairperson, Fermin Meriang in an April 5 letter to Silver Lake’s lawyer said although the company’s innovative venture is laudable, the Republic’s reputation among the international financial community and our ability to attract international grants and aid depend on our compliance with international anti-money laundering controls.”
It added that unless cryptocurrency can be regulated, such business will not be in the best interest of the country.
The FIB, however, urged the company to use its expertise ‘to educate and inform lawmakers and the general public about the risks and opportunities of these businesses so that an effective regulatory structure can be adopted as soon as possible.”
The FIB’s decision also took into account the FIC a resolution adopted on March 19. a moratorium is imposed “until such time that we have a suitable legal framework in place.”
The FIC said the moratorium is in effect until the agency “has determined that is able to monitor, supervise, and regulate all financial institutions wishing to engage in transactions involving or utilizing crypto-assets and/or cryptocurrency under this legal framework.”
The FIC noted the heightened risks associated with emerging technologies that deal with virtual assets and virtual currency service providers.
The resolution is Palau’s response to websites popping up claiming that the country is behind cryptocurrency activities. (By Bernadette H. Carreon)